JBT Corporation Reports Third Quarter 2022 Results

Summary of Third Quarter 2022 Results

FoodTech

AeroTech

Total JBT

Total Revenue Growth (Year over Year)

11.1 %

32.4 %

16.3 %

Operating Profit Margin

14.4 %

7.4 %

8.3 %

Adjusted EBITDA Margin⁽¹⁾

19.3 %

8.2 %

13.4 %

(1) Non-GAAP figure. Please see supplemental schedules for adjustments and reconciliations.

FY 2022 Guidance

Consolidated Revenue Growth (Year over Year)

15.75 – 16.25%

Corporate Expense (% of Sales)

~2.9%

Interest Expense

~$15M

Tax Rate (Excluding Discrete Items)

21 – 22%

GAAP EPS

$4.05 – $4.20

Adjusted EPS⁽¹⁾

$4.65 –  $4.80

(1) Non-GAAP figure. Please see supplemental schedules for adjustments and reconciliations.

JBT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited and in millions, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Revenue

$               555.4

$               477.4

$            1,566.9

$            1,370.7

Cost of sales

395.7

334.9

1,116.4

945.1

Gross profit

159.7

142.5

450.5

425.6

Gross profit %

28.8 %

29.8 %

28.8 %

31.0 %

Selling, general and administrative expense

112.3

100.9

329.0

296.9

Restructuring expense

1.5

1.1

2.8

3.1

Operating income

45.9

40.5

118.7

125.6

Operating income %

8.3 %

8.5 %

7.6 %

9.2 %

Pension expense, other than service cost

0.1

0.1

0.1

0.1

Net interest expense

3.6

2.1

8.2

6.3

Net income before income taxes

42.2

38.3

110.4

119.2

Provision for income taxes

8.0

9.0

17.2

32.4

Net income

$                 34.2

$                 29.3

$                 93.2

$                 86.8

Basic earnings per share:

Net income

$                 1.07

$                 0.91

$                 2.91

$                 2.71

Diluted earnings per share:

Net income

$                 1.07

$                 0.91

$                 2.90

$                 2.71

Weighted average shares outstanding

Basic

32.0

32.0

32.0

32.0

Diluted

32.1

32.1

32.1

32.1

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF DILUTED EARNINGS PER SHARE TO ADJUSTED DILUTED EARNINGS PER SHARE

(Unaudited and in millions, except per share data)

Q3 2022

Q2 2022

Q1 2022

Q4 2021

Q3 2021

Net Income

$       34.2

$       33.4

$       25.6

$       31.6

$       29.3

Non-GAAP adjustments

Restructuring related costs

Restructuring expense

1.5

0.8

0.5

2.5

1.1

Inventory impairment due to restructuring

—

—

0.2

0.2

—

M&A related cost⁽¹⁾

4.4

1.9

2.6

0.7

3.6

LIFO expense⁽²⁾

2.8

1.2

0.3

0.4

—

Impact on tax provision from Non-GAAP adjustments⁽³⁾

(2.2)

(1.1)

(1.0)

(1.1)

(1.1)

Impact on tax provision from remeasurement of a deferred tax liability

—

—

—

(4.6)

—

Adjusted net income

$       40.7

$       36.2

$       28.2

$       29.7

$       32.9

Net income

$       34.2

$       33.4

$       25.6

$       31.6

$       29.3

Total shares and dilutive securities

32.1

32.1

32.1

32.1

32.1

Diluted earnings per share from net income

$       1.07

$       1.04

$       0.80

$       0.99

$       0.91

Adjusted net income

$       40.7

$       36.2

$       28.2

$       29.7

$       32.9

Total shares and dilutive securities

32.1

32.1

32.1

32.1

32.1

Adjusted diluted earnings per share from net income

$       1.27

$       1.13

$       0.88

$       0.93

$       1.02

(1) M&A related costs include integration costs, amortization of inventory step-up from business combinations, earn out adjustments to fair value, advisory and transaction costs for both potential and completed M&A transactions and strategy.

(2) Beginning in the second quarter of 2022, we made a change to the adjusted operating earnings and adjusted net income measures to exclude the impact of last-in first-out ("LIFO") expense or benefit because it reduces volatility that is not reflective of our operations, and allows for better comparability to our peers. Prior year adjusted operating earnings and adjusted net income figures have been revised to align with this change in presentation.

(3) Impact on tax provision was calculated using the enacted rate for the relevant jurisdiction for each quarter shown.

The above table reports adjusted income from continuing operations and adjusted diluted earnings per share from continuing operations, which are non-GAAP financial measures. We use these measures internally to make operating decisions and for the planning and forecasting of future periods, and therefore provide this information to investors because we believe it allows more meaningful period-to-period comparisons of our ongoing operating results, without the fluctuations in the amount of certain costs that do not reflect our underlying operating results.

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

(Unaudited and in millions)

Q3 2022

Q2 2022

Q1 2022

Q4 2021

Q3 2021

Net income

$    34.2

$    33.4

$    25.6

$    31.6

$    29.3

Income tax provision

8.0

6.3

2.9

1.9

9.0

Interest expense, net

3.6

2.5

2.1

2.4

2.1

Depreciation and amortization

20.1

19.2

19.9

20.2

20.0

EBITDA

65.9

61.4

50.5

56.1

60.4

Restructuring related costs

Restructuring expense

1.5

0.8

0.5

2.5

1.1

Inventory impairment due to restructuring

—

—

0.2

0.2

—

Pension expense (income), other than service cost

0.1

—

—

(1.4)

0.1

M&A related cost⁽¹⁾

4.4

1.9

2.6

0.7

3.6

LIFO expense⁽²⁾

2.8

1.2

0.3

0.4

—

Adjusted EBITDA

$    74.7

$    65.3

$    54.1

$    58.5

$    65.2

Total revenue

$  555.4

$  542.3

$  469.2

$  497.6

$  477.4

Adjusted EBITDA %

13.4 %

12.0 %

11.5 %

11.8 %

13.7 %

(1) M&A related costs include integration costs, amortization of inventory step-up from business combinations, earn out adjustments to fair value, advisory and transaction costs for both potential and completed M&A transactions and strategy.

(2) Beginning in the second quarter of 2022, we made a change to the adjusted operating earnings and adjusted net income measures to exclude the impact of last-in first-out ("LIFO") expense or benefit because it reduces volatility that is not reflective of our operations, and allows for better comparability to our peers. Prior year adjusted operating earnings and adjusted net income figures have been revised to align with this change in presentation.

The above table reports EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. Given the Company's focus on growth through acquisitions, management believes EBITDA facilitates an evaluation of business performance while excluding the impact of amortization due to the step up in value of intangible assets, and the depreciation of fixed assets. We use Adjusted EBITDA internally to make operating decisions and believe this information is helpful to investors because it allows more meaningful period-to-period comparisons of our ongoing operating results.

JBT CORPORATION

BUSINESS SEGMENT DATA

(Unaudited and in millions)

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Revenue

JBT FoodTech

$                 398.9

$                 359.1

$              1,149.3

$              1,031.6

JBT AeroTech

156.6

118.3

417.8

339.1

Other revenue and intercompany eliminations

(0.1)

—

(0.2)

—

Total revenue

$                 555.4

$                 477.4

$              1,566.9

$              1,370.7

Income before income taxes

Segment operating profit⁽¹⁾⁽²⁾

JBT FoodTech

$                   57.3

$                   48.9

$                 147.4

$                 141.9

JBT FoodTech segment operating profit %

14.4 %

13.6 %

12.8 %

13.8 %

JBT AeroTech

11.6

7.0

28.4

29.0

JBT AeroTech segment operating profit %

7.4 %

5.9 %

6.8 %

8.6 %

Total segment operating profit

68.9

55.9

175.8

170.9

Total segment operating profit %

12.4 %

11.7 %

11.2 %

12.5 %

Corporate expense

21.5

14.3

54.3

42.2

Restructuring expense

1.5

1.1

2.8

3.1

Operating income

$                   45.9

$                   40.5

$                 118.7

$                 125.6

Operating income %

8.3 %

8.5 %

7.6 %

9.2 %

Other business segment information

Three Months Ended September 30,

Nine Months Ended September 30,

Inbound orders

2022

2021

2022

2021

JBT FoodTech

$                 348.5

$                 382.0

$              1,155.9

$              1,165.3

JBT AeroTech

113.2

138.7

434.1

421.6

Total inbound orders

$                 461.7

$                 520.7

$              1,590.0

$              1,586.9

As of September 30,

Order Backlog

2022

2021

JBT FoodTech

$                 662.0

$                 544.7

JBT AeroTech

387.1

369.3

Total order backlog

$              1,049.1

$                 914.0

(1) Segment operating profit is defined as total segment revenue less segment operating expenses. Corporate expense, restructuring expense, interest income and expense, pension expense other than service, and income taxes are not allocated to the segments. Corporate expense generally includes corporate staff-related expense, stock-based compensation, LIFO adjustments, certain foreign currency related gains and losses, and the impact of unusual or strategic events not representative of segment operations.

(2) Total segment operating profit, as presented elsewhere in this release, is a non-GAAP measure. The table above includes a reconciliation of total segment operating profit to operating income. We believe that this measure provides to investors a more comprehensive understanding of the information used by management in evaluating the performance of its segment operations. It is not intended to nor shall be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP.

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF OPERATING PROFIT TO ADJUSTED EBITDA BY SEGMENT

(Unaudited and in millions)

Three Months Ended September 30, 2022

(In millions)

JBT FoodTech

JBT AeroTech

Corporate
(Unallocated)

Consolidated

Operating profit

$               57.3

$               11.6

$                (23.0)

$               45.9

Restructuring expense

—

—

1.5

1.5

M&A related cost⁽¹⁾

1.9

—

2.5

4.4

LIFO expense⁽²⁾

—

—

2.8

2.8

Adjusted operating profit

59.2

11.6

(16.2)

54.6

Depreciation and amortization

17.8

1.2

1.1

20.1

Adjusted EBITDA

$               77.0

$               12.8

$                (15.1)

$               74.7

Revenue

$             398.9

$             156.6

$                  (0.1)

$             555.4

Operating profit %

14.4 %

7.4 %

8.3 %

Adjusted operating profit %

14.8 %

7.4 %

9.8 %

Adjusted EBITDA %

19.3 %

8.2 %

13.4 %

Nine Months Ended September 30, 2022

(In millions)

JBT FoodTech

JBT AeroTech

Corporate
(Unallocated)

Consolidated

Operating profit

$             147.4

$               28.4

$                (57.1)

$             118.7

Restructuring related costs

Restructuring expense

—

—

2.8

2.8

Inventory impairment due to restructuring

0.2

—

—

0.2

M&A related cost⁽¹⁾

2.4

—

6.5

8.9

LIFO expense⁽²⁾

—

—

4.3

4.3

Adjusted operating profit

150.0

28.4

(43.5)

134.9

Depreciation and amortization

52.7

3.6

2.9

59.2

Adjusted EBITDA

$             202.7

$               32.0

$                (40.6)

$             194.1

Total revenue

$          1,149.3

$             417.8

$                  (0.2)

$          1,566.9

Operating profit %

12.8 %

6.8 %

7.6 %

Adjusted operating profit %

13.1 %

6.8 %

8.6 %

Adjusted EBITDA %

17.6 %

7.7 %

12.4 %

(1) M&A related costs include integration costs, amortization of inventory step-up from business combinations, earn out adjustments to fair value, advisory and transaction costs for both potential and completed M&A transactions and strategy.

(2) Beginning in the second quarter of 2022, we made a change to the adjusted operating earnings and adjusted net income measures to exclude the impact of last-in first-out ("LIFO") expense or benefit because it reduces volatility that is not reflective of our operations, and allows for better comparability to our peers. Prior year adjusted operating earnings and adjusted net income figures have been revised to align with this change in presentation.

The above table reports EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. Given the Company's focus on growth through acquisitions, management believes EBITDA facilitates an evaluation of business performance while excluding the impact of amortization due to the step up in value of intangible assets, and the depreciation of fixed assets. We use Adjusted EBITDA internally to make operating decisions and believe this information is helpful to investors because it allows more meaningful period-to-period comparisons of our ongoing operating results. 

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF OPERATING PROFIT TO ADJUSTED EBITDA BY SEGMENT

(Unaudited and in millions)

Three Months Ended September 30, 2021

(In millions)

JBT FoodTech

JBT AeroTech

Corporate
(Unallocated)

Consolidated

Operating profit

$               48.9

$                 7.0

$                (15.4)

$               40.5

Restructuring expense

—

—

1.1

1.1

M&A related cost⁽¹⁾

0.3

—

3.3

3.6

Adjusted operating profit

49.2

7.0

(11.0)

45.2

Depreciation and amortization

17.9

1.2

0.9

20.0

Adjusted EBITDA

67.1

8.2

(10.1)

65.2

Revenue

$             359.1

$             118.3

$                     —

$             477.4

Operating profit %

13.6 %

5.9 %

8.5 %

Adjusted operating profit %

13.7 %

5.9 %

9.5 %

Adjusted EBITDA %

18.7 %

6.9 %

13.7 %

Nine Months Ended September 30, 2021

(In millions)

JBT FoodTech

JBT AeroTech

Corporate
(Unallocated)

Consolidated

Operating profit

$             141.9

$               29.0

$                (45.3)

$             125.6

Restructuring expense

—

—

3.1

3.1

M&A related cost⁽¹⁾

1.1

—

7.4

8.5

LIFO expense⁽²⁾

—

—

0.6

0.6

Adjusted operating profit

143.0

29.0

(34.2)

137.8

Depreciation and amortization

51.1

3.2

2.3

56.6

Adjusted EBITDA

$             194.1

$               32.2

$                (31.9)

$             194.4

Revenue

$          1,031.6

$             339.1

$                     —

$          1,370.7

Operating profit %

13.8 %

8.6 %

9.2 %

Adjusted operating profit %

13.9 %

8.6 %

10.1 %

Adjusted EBITDA %

18.8 %

9.5 %

14.2 %

(1) M&A related costs include integration costs, amortization of inventory step-up from business combinations, earn out adjustments to fair value, advisory and transaction costs for both potential and completed M&A transactions and strategy.

(2) Beginning in the second quarter of 2022, we made a change to the adjusted operating earnings and adjusted net income measures to exclude the impact of last-in first-out ("LIFO") expense or benefit because it reduces volatility that is not reflective of our operations, and allows for better comparability to our peers. Prior year adjusted operating earnings and adjusted net income figures have been revised to align with this change in presentation.

The above table reports EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. Given the Company's focus on growth through acquisitions, management believes EBITDA facilitates an evaluation of business performance while excluding the impact of amortization due to the step up in value of intangible assets, and the depreciation of fixed assets. We use Adjusted EBITDA internally to make operating decisions and believe this information is helpful to investors because it allows more meaningful period-to-period comparisons of our ongoing operating results.  

JBT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in millions)

September 30,

December 31,

2022

2021

Cash and cash equivalents

$                               52.6

$                               78.8

Trade receivables, net of allowances

374.1

333.5

Inventories

346.8

229.1

Other current assets

100.9

77.3

Total current assets

874.4

718.7

Property, plant and equipment, net

262.2

267.6

Other assets

1,417.9

1,155.1

Total assets

$                          2,554.5

$                          2,141.4

Short-term debt

$                                 0.8

$                                  —

Accounts payable, trade and other

221.0

186.0

Advance and progress payments

216.4

190.2

Other current liabilities

181.0

173.7

Total current liabilities

619.2

549.9

Long-term debt, less current portion

979.0

674.4

Accrued pension and other post-retirement benefits, less current portion

44.4

57.6

Other liabilities

105.7

109.0

Common stock and additional paid-in capital

217.8

214.5

Retained earnings

817.0

733.4

Accumulated other comprehensive loss

(228.6)

(197.4)

Total stockholders' equity

806.2

750.5

Total liabilities and stockholders' equity

$                          2,554.5

$                          2,141.4

JBT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in millions)

Nine Months Ended September 30,

2022

Cash flows from operating activities

Net income

$                               93.2

$                               86.8

Adjustments to reconcile income to cash provided by operating activities

Depreciation and amortization

59.2

56.6

Other

17.7

9.5

Changes in operating assets and liabilities

Trade accounts receivable, net

(43.0)

(16.1)

Inventories

(92.7)

(26.6)

Accounts payable, trade and other

41.6

40.0

Advance and progress payments

15.1

22.7

Other - assets and liabilities, net

(16.5)

(9.6)

Cash provided by operating activities

74.6

163.3

Cash flows from investing activities

Acquisitions, net of cash acquired

(329.7)

(185.3)

Capital expenditures

(65.7)

(33.9)

Other

0.9

2.0

Cash required by investing activities

(394.5)

(217.2)

Cash flows from financing activities

Net proceeds (payments) for domestic credit facilities

312.4

(260.8)

Proceeds from issuance of 2026 convertible senior notes, net of issuance costs

—

391.5

Purchase of convertible bond hedge

—

(65.6)

Proceeds from sale of warrants

—

29.5

Dividends

(9.8)

(9.5)

Payment of acquisition date earnout liability

—

(16.1)

Other

(4.0)

(2.1)

Cash provided by financing activities

298.6

66.9

Effect of foreign exchange rate changes on cash and cash equivalents

(4.9)

(2.3)

(Decrease) increase in cash and cash equivalents

(26.2)

10.7

Cash and cash equivalents, beginning of period

78.8

47.5

Cash and cash equivalents, end of period

$                               52.6

$                               58.2

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

FREE CASH FLOW

(Unaudited and in millions)

Nine Months Ended September 30,

2022

2021

Cash provided by operating activities

$                               74.6

$                             163.3

Less: capital expenditures

65.7

33.9

Plus: proceeds from disposal of assets

0.9

2.0

Plus: pension contributions

2.9

12.3

Free cash flow (FCF)

$                               12.7

$                             143.7

The above table reports Free cash flow, which is a non-GAAP financial measure. We use Free cash flow internally as a key indicator of our liquidity and ability to service debt, invest in business combinations, and return money to shareholders and believe this information is useful to investors because it provides an understanding of the cash available to fund these initiatives. For Free cash flow purposes we consider contributions to pension plans to be more comparable to payment of debt, and therefore exclude these contributions from the calculation of Free cash flow.

JBT CORPORATION

NET DEBT CALCULATION

(Unaudited and in millions)

September 30,

December 31,

September 30,

Change from

Change from

2022

2021

2021

Prior Year-End

Prior Year

Total debt

$                 979.8

$                 674.4

$                 653.2

$                 305.4

$                 326.6

Cash and cash equivalents

(52.6)

(78.8)

(58.2)

26.2

5.6

Net debt

$                 927.2

$                 595.6

$                 595.0

$                 331.6

$                 332.2

JBT CORPORATION

BANK TOTAL NET LEVERAGE RATIO CALCULATION

(Unaudited and in millions)

As of

September 30, 2022

Total debt

$                                 979.8

Cash and cash equivalents

(52.6)

Net debt

927.2

Other items considered debt under the credit agreement

20.5

Consolidated total indebtedness⁽¹⁾

$                                 947.7

Trailing twelve months Adjusted EBITDA

$                                 252.6

Pro forma EBITDA of recent acquisitions⁽²⁾

23.3

Trailing twelve months pro forma Adjusted EBITDA

275.9

Other adjustments net to earnings under the credit agreement

(2.9)

Consolidated EBITDA⁽¹⁾

$                                 273.0

Bank total net leverage ratio (Consolidated Total Indebtedness / Consolidated EBITDA)

3.5

Total net debt to trailing twelve months pro forma Adjusted EBITDA

3.4

(1) As defined in the credit agreement

(2) Pro forma EBITDA related to the acquisitions in the prior twelve months.

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF DILUTED EARNINGS PER SHARE GUIDANCE TO ADJUSTED DILUTED

EARNINGS PER SHARE GUIDANCE

(Unaudited and in cents)

Guidance

Guidance

Q4 2022

Full Year 2022

Diluted earnings per share from net income

$1.15 - $1.30

$4.05 - $4.20

Non-GAAP adjustments:

Restructuring related costs⁽¹⁾

—

0.09

M&A related costs⁽²⁾

0.17

0.45

LIFO expense⁽³⁾

0.08

0.22

Impact on tax provision from Non-GAAP adjustments⁽⁴⁾

(0.05)

(0.16)

Adjusted diluted earnings per share from net income

$1.35 - $1.50

$4.65 - $4.80

(1) Restructuring related costs is estimated to be approximately $3 million for the full year 2022. The mid-point amount has been divided by our estimate of 32.1 million total shares and dilutive securities to derive earnings per share.

(2) M&A related costs are estimated to be approximately $5-6 million and $14-15 million for the fourth quarter 2022 and full year 2022, respectively. The mid-point amount has been divided by our estimate of 32.1 million total shares and dilutive securities to derive earnings per share.

(3) LIFO expense is estimated to be approximately $2-3 million and $7 million for the fourth quarter 2022 and full year 2022, respectively. The mid-point amount has been divided by our estimate of 32.1 million total shares and dilutive securities to derive earnings per share.

(4) Impact on tax provision was calculated using the Company's effective tax rate of approximately 21-22%. 

JBT CORPORATION

NON-GAAP FINANCIAL MEASURES

RECONCILIATION OF OPERATING PROFIT MARGIN GUIDANCE TO ADJUSTED EBITDA MARGIN GUIDANCE

(Unaudited and in percents)

Guidance Q4 2022

Guidance Full Year 2022

JBT FoodTech

JBT AeroTech

JBT FoodTech

JBT AeroTech

Operating profit

13.75 - 14.50 %

11.00 - 12.00 %

13.00 - 13.30 %

7.75 - 8.25 %

M&A related cost⁽¹⁾

~ 0.75

—

~ 0.50

—

Adjusted operating profit

14.50 - 15.25

11.00 - 12.00

13.50 - 13.80

7.75 - 8.25

Depreciation and amortization

~ 4.50

~ 0.75

~ 4.50

~ 0.75

Adjusted EBITDA %

19.00 - 19.75 %

11.75 - 12.75 %

18.00 - 18.30 %

8.50 - 9.00 %

(1) Guidance includes M&A related costs which include integration costs, amortization of inventory step-up from business combinations, earn out adjustments to fair value, advisory and transaction costs for both potential and completed M&A transactions and strategy.